- Zerodha CEO Nithin Kamath criticised closing Indian stock exchanges for BMC polls
- Kamath said the closure shows poor planning and lack of understanding of global market impact
- He quoted Charlie Munger on incentives, saying no one opposes the holiday due to lack of incentive
Zerodha founder and CEO Nithin Kamath has questioned the shutting of the Indian stock exchanges for the local body elections in Mumbai. Flagging the global links of the Indian markets, he called out "poor planning" behind such closures.
Mumbai's Dalal Street remains closed today in view of a public holiday declared by the Maharashtra government to ensure maximum voter participation in the Brihanmumbai Municipal Corporation (BMC) elections.
This means no trades will be executed today in the capital markets and the futures and options segments on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
Criticising the suspension of trades for the day, Kamath said the decision shows a lack of understanding of the impact of the stock exchange closure.
"Indian stock exchanges are closed today for Mumbai's municipal elections. The fact that our exchanges, which have international linkages, are shut down for a local municipal election shows poor planning and a serious lack of appreciation for second-order effects," Kamath said in an online post.
Kamath also quoted legendary investor Charlie Munger: "Show me the incentive, and I will show you the outcome." The markets are closed since there's no incentive for those who matter in opposing the holiday, he added.
Such closures show that Indian markets have a long way to go before global investors take them seriously, Kamath said.
"The holiday exists because no one who matters has any incentive to oppose the market holiday. It also tells you how far we have to go before global investors take us seriously," read the entrepreneur's online post.
The criticism comes at a time the Indian equity markets are under immense pressure, struggling with a weak start to the new year. Global uncertainties, rising volatility, and continued foreign outflows continue to weigh on the markets.
The domestic markets ended lower yesterday after a volatile trading session, with IT and realty stocks recording losses. While Sensex slipped 245 points, Nifty ended 66.7 points lower at 25,665.60.
Trading on the NSE and the BSE will resume tomorrow.
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